“Celebrity Tax Guy” Tax Preparer Allegedly Pocketed $1.2 Million in Tax Refunds That Belonged to 144 Clients

LOS ANGELES 

The operator of a Glendale tax preparation business prepared taxes for his clients and ripped them off by diverting their tax refunds into his own bank account, according to officials.

Michael Joseph Calalang Cabuhat used some of that money to write a $24,500 check to purchase a Ferrari 360 Spider.

Today, Cabuhat was arrested and the Ferrari was seized, officials said.

 Cabuhat who refers to himself as “Celebritytaxguy,” is being charged with wire fraud, aggravated identity theft and structuring financial transactions to evade reporting requirements.

From 2010 through 2015, Cabuhat allegedly stole more than $1.2 million in refunds that should have gone to 144 clients,

In addition to the tax refund scheme, in September of 2014, Cabuhat structured cash deposits to avoid federal bank reporting requirements.

“Corrupt tax return preparers harm their clients, other taxpayers, and the United States government,” said U.S. Attorney Eileen M. Decker. “Mr. Cabuhat’s clients entrusted him with an important duty that we all have at this time of year, and he abused that fundamental trust.”

Cabuhat is half-owner of VisionQwest Resource Group, Inc., which operates VisionQwest Accountancy Group and Icon Tax Group, Inc., in Glendale.

If convicted of the charges,  Cabuhat is facing up to 27 years in federal prison.

According to a 36-page affidavit filed in the case, Cabuhat defrauded his clients in at least two ways.

In some instances, the taxpayer-client was given a copy of a tax return that showed a much smaller refund amount than on the tax return that Cabuhat filed with the IRS on behalf of the taxpayer, according to the affidavit, according to authorities.

Sometimes, Cabuhat would simply increase the amount of tax owed on the taxpayer’s copy of the return, thereby decreasing the refund; and sometimes, he would doctor the expenses reported on the filed returns to increase the refund.

Without the taxpayer’s knowledge, Cabuhat directed the IRS to deposit the small amount reflected on the taxpayer’s copy of the tax return into the taxpayer’s bank account, and to deposit the remainder into a bank account that Cabuhat controlled.

In other instances, according to the complaint, Cabuhat gave the taxpayer-client a copy of a tax return that falsely showed a tax due, but Cabuhat would file with the IRS a tax return that sought a refund.

In these instances, Cabuhat would tell the taxpayer to make the “tax payment” directly to him so he could remit the payment to the IRS.

In fact, Cabuhat allegedly kept the “tax payment” and directed the IRS to deposit the refund that the client should have received into a bank account that he controlled.

Cabuhat is presumed innocent unless proven guilty.